Excerpt:.....the public as well as to banks, engaged in foreign exchange control for issue of permits for foreign travel and arrangement of foreign exchange in other cases, and dealing with the exchange of notes and coins when required by the public, are part of the monetary and banking transactions of the central and state governments entrusted to the reserve bank under the reserve bank of india act, 1934. they are required to be followed by the reserve bank in every region on the basis of the guidelines issued for the purpose, and it does not vary from region to region depending on the local conditions or traditions or usages. the reserve bank might have, by experience found that the classification works well in all the regions......work in the regional office at new delhi along with other local candidate, why the reserve bank regional office at jammu, finds it difficult to accommodate candidates who have passed graduation from delhi university, or punjab university, is too difficult to understand. why all those candidates cannot pull together and maintain efficiency and harmonious relation in the regional offices at new delhi, chandigarh and jammu, is still a problem, em which presents no answer. these examples, ex facie show that the zonal classification if utterly unsound and prima facie arbitrary and it cuts the very concept of equality enshrined in art. 16(1). 10. let me now see whether the above classification has any nexus with the object sought to be achieved. the object of selecting candidates is to.....

Judgment:ORDER

1. These petitions raise an important question of law relating to recruitment to Class III cadre in the Reserve Bank of India, which is a body corporate constituted under the Reserve Bank of India Act, 1934. The matter arises in this way :

The Reserve Bank is entrusted with all the monetary and banking transactions of the Central and State Governments. It has got its branch offices in almost all the States including one at Bangalore. The Bangalore Branch has jurisdiction over the entire State of Karnataka. In the beginning of 1974, the Manager of the Bangalore Branch invited applications from Indian citizens for enlistment in the waiting lists for the common cadre of Clerks Grade II/Coin-Note Examiners Grade II which are Class III posts. The minimum qualification prescribed was a Bachelor's degree with minimum of 40 per cent marks aggregate of a recognised university, preferably in Economics, Commerce, Banking, Statistics, Mathematics. The petitioners were amongst several candidates who responded to the advertisement and applied for the posts. The petitioners' applications, however, were not considered solely on the ground that they have not passed the qualifying examination from any one of the universities established in the Karnataka State. It is the contention of the petitioners that their exclusion is arbitrary discriminatory and violative of the fundamental right guaranteed to them under Art. 16(1) of the Constitution.

2. The non-consideration of the petitioners' applications is sought to be justified by the Reserve Bank of India, on the following contentions :

For the purpose of recruitment to Class III and Class IV posts, the entire country has been divided into 17 zones with a Regional office at every zone. The vacancies in the cadre of Class III posts arising in every Regional Office are being filled up only from candidates who have passed the qualifying examination from Universities established in the respective zones. The classification based on such graduation is a reasonable classification designed to achieve administrative efficiency and to promote maintenance of good staff relations. Familiarity with local conditions, traditions and usages pertaining to a particular zone is reflected in the standards prevailing in different Universities and this qualification adds to the efficiency of candidates in a particular zone. That this classification is rational and is intended to achieve the object of maintaining the highest efficiency and harmonious working conditions amongst the members of staff.

3. The question is, whether the classification made by the Reserve Bank, on the basis of gradation from the universities established in the respective zone is a valid classification within the scope of Art. 16 of the Constitution.

4. Article 16 provides :

16. (1) There shall be equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State.

(2) No citizen shall, on grounds only of religion, race, caste, sex, descent, place of birth, residence or any of them, be ineligible for, or discriminated against in respect of, any employment or office under the State.

(3) Nothing in this article shall prevent Parliament from making any law prescribing,, in regard to a class or classes of employment or appointment to an office under the Government of, or any local or other authority within, a State or Union Territory any requirement as to residence within that State or Union Territory prior to such employment or appointment.

(4) Nothing in this article shall prevent the State from making any provision for the reservation of appointments or posts in favour of any backward class of citizens which, in the opinion of the State, is not adequately represented in the services under the State.

(5) Nothing in this article shall affect the operation of any law which provides that the incumbent of an office in connection with the affairs of any religions or denominational institution or any member of the governing body thereof shall be a person professing a particular religion or belonging to a particular denomination.

The scope of Art. 16 is well-settled. I do not want, therefore, to have a lengthy review of the cases. Briefly, I may state the relevant principles. The Article, while conferring a right of equality in matters relating to employment or appointment, permits a reasonable classification of the employees. It also permits the State to prescribe relevant qualification for holding the posts. (See S. G. Jaisinghani v. Union of India : [1967]65ITR34(SC) . Whether the classification of the employees for purposes of appointment or promotion is reasonable or not depends upon the facts of each case. Unless classification is prima facie unjust, the onus lies on party attacking the classification to show that it is unreasonable and violative of Art. 16(1). (See Govind Dattatray Kelkar v. Chief Controller of Imports and Exports, : (1967)ILLJ691SC . Mere production of inequality is however, not enough to attract the constitutional inhibition because every classification is likely to produce some degree of inequality. The State is legitimately empowered to make reasonable classification for securing the requisite standard of efficiency in services and such classification need not be scientifically perfect or logically complete (See Ganga Ram v. Union of India : [1970]3SCR481 . In the same case, Dua. J. speaking for the Supreme Court observed :

'In applying the wide language of Arts. 14 and 16 to concrete cases doctrinaire approach should be avoided and the matter considered in a practical way, of course, without whittling down the equality clauses. The classification, in order to be outside the vice of inequality, must, however, be founded on an intelligible differential which on rational grounds distinguishes persons grouped together from those left out. The differences which warrant a classification must be real and substantial and must bear a just and reasonable relation to the object sought to be achieved. If this test is satisfied, then the classification cannot be hit by the vice of inequality.

'.... Classification, however, is fraught with the danger that it may produce artificial inequalities and, therefore, the right to classify is hedged in with salient restrains; or else, the guarantee of equality will be submerged in class legislation masquerading as laws meant to govern well-marked classes characterized by different and distinct attainments classification, therefore, must be truly founded on substantial differences which distinguish persons grouped together from those left out of the group and such differential attributes must bear a just and rational relation to the object sought to be achieved.' On the scope of judicial scrutiny, the learned Judge continued : 'Judicial scrutiny can, therefore, extend only to the consideration whether the classification rests on a reasonable basis and whether it bears nexus with the object in view. It cannot extend to embarking upon a nice or mathematical evaluation of the basis of classification, for where such an inquiry is permissible it would be open to the Courts to substitute their own judgment for that of the Legislature or the rule-making authority on the need to classify or the desirability of achieving a particular object.'

5. Now, in the instant case, the object of classification is to select the best candidates and to achieve administrative efficiency in the Regional Office. The candidates who have passed the qualifying examination prescribed for Class III posts, in the universities established in a particular zone, are grouped together. It is said that such candidates have got better familiarity about the local conditions, traditions and usages pertaining to a particular zone than those who have passed the degree course from other universities. In other words, it is founded on the ground that persons who have passed degree examination in the universities established with in the area of a Regional Office will have more familiarity with the local conditions, traditions and usages, and such local conditions, traditions usages add to the efficiency of candidates. It is, perhaps, assumed that those who study for a couple of years in any university will move about or otherwise acquaint themselves with local conditions, traditions and usages of the region where the university is situated. That may be a reasonable assumption, although some students could now pass degree course as external candidates, the facility of which is being offered by some of the universities.

6. But, there is another aspect of the problem which is very important. Let me have a close look at the classification or zonal division made by the Reserve Bank. The entire country has been divided into 17 zones in the following manner :

7. The above territorial jurisdiction gives at us an interesting picture. The Regional Office at Calcutta is having jurisdiction over West Bengal, Manipur, Tripura, Meghalaya, Nagaland, Arunachal Pradesh and Mizoram and the Andaman and Nicober Islands. The candidates who have passed the qualifying examination from the universities established in these different States are only considered eligible for recruitment to Class III posts in the Calcutta Regional Office. In the Gauhati Regional Office, the candidates who have passed the graduation in the universities of Assam, Manipur, Tripura, Meghalaya, Nagaland, Arunachal Pradesh and Mizoram are only considered. In Gauhati Regional Office, the Calcutta University graduates are not eligible for consideration, and so also in Calcutta Regional Office, the persons who have graduated from the University at Assam are excluded. If Calcutta university graduates could harmoniously work and contribute to the efficiency along with candidates of Manipur, Tripura, Meghalaya, Arunachal Pradesh and Mizoram, in the Regional Office at Calcutta one does not know why they could not contribute to such efficiency in the Regional Office at Gauhati, where candidates from Manipur, Tripura, Meghalaya, Nagaland, Arunachal Pradesh and Mizoram are also working.

8. Let me now took at the Regional Office at Madras. It comprises of Tamil Nadu, Kerala, Pondicherry and Lakshadweep. In this Regional Office, the candidates who have passed the qualifying examination from all universities established in that entire area are eligible for consideration for appointment to Class III posts. In other words, the graduates from Tamil Nadu University at Kerala work together harmoniously. But when I turn to the Regl. Office at Trivandrum/Cochin, the graduates from the university at Kerala alone are considered eligible along with candidates from Lakshadweep Islands. The graduates from Tamil Nadu universities have been excluded in the Regional Office at Trivandrum/Cochin. The purpose of that exclusion is, that the candidates who have graduated from Tamil Nadu universities, do not contribute to the efficient and harmonious working at Trivandrum/Cochin. If the candidate with degree from Tamil Nadu universities could work along with the graduates from Kerala university and contribute to the highest efficiency in the Regional Office at Madras, I fail to understand why they cannot together maintain efficiency in the Regional Office at Trivandrum/Cochin. This is a question which keeps me baffling and evidently without a reasonable answer.

9. Similar is the anomaly in the Regional Office at New Delhi and the Regional Office at Chandigarh. The recruitment at Chandigarh Regional Office is looked after by New Delhi Office. In the Regional Office at Chandigarh, the University graduates from Punjab, Haryana, Union Territories of Himachal Pradesh and Chandigarh alone are eligible for consideration, whereas in New Delhi Regional Office, in addition to the above graduates, the graduates from Delhi and J & K Universities are also considered to be eligible for recruitment. But Jammu Regional office excludes all those graduates and considers only those who have passed the qualifying examination from the University within the area of Jammu and Kashmir. If candidates who have passed the qualifying examination from the University established in the area of Jammu and Kashmir, could harmoniously work in the Regional Office at New Delhi along with other local candidate, why the Reserve Bank Regional Office at Jammu, finds it difficult to accommodate candidates who have passed graduation from Delhi University, or Punjab University, is too difficult to understand. Why all those candidates cannot pull together and maintain efficiency and harmonious relation in the Regional Offices at New Delhi, Chandigarh and Jammu, is still a problem, em which presents no answer. These examples, ex facie show that the zonal classification if utterly unsound and prima facie arbitrary and it cuts the very concept of equality enshrined in Art. 16(1).

10. Let me now see whether the above classification has any nexus with the object sought to be achieved. The object of selecting candidates is to secure the highest efficiency and harmonious relations in the administration. The graduates of the local universities are considered at every Regional Office, because they are credited with familiarity with the local conditions, traditions and usages. But the classification cannot be upheld unless the familiarity with the local conditions, traditions and usages are relevant for performing the duties by Class III employees in each zone I have, therefore, to see the nature of duties and responsibilities of these class III employees. In the supplementary Statement of Objections filed on behalf of the Reserve Bank, the nature of their work is set out. They are :

(i) Dealing with deposits into the accounts of the Central and State Governments by the public as well as by representatives of Government departments.

(ii) Dealing with deposits from local Banks.

(iii) Dealing with payments to the public on behalf of the Central and State Governments.

(iv) Managing public debt, issuing securities, interest thereon to the public as well as to the Banks.

(v) Engaged in Foreign Exchange Control for issue of permits for foreign travel arrangement of foreign exchange in other cases where they are permitted and dealing with passage clearance for travel abroad.

(vi) Dealing with exchange of notes and coins when required by the public.

The above work does not vary from zone to zone or region to region. They are set works entrusted to every Regional Office and expected to be performed by every Class III employee of the Reserve Bank. Dealing with the deposits into the accounts of the Central and State Governments, dealing with the deposits from the local Banks, dealing with payments to the public on behalf of the Central and State Government managing public debt, issuing securities, interest thereon, to the public as well as to Banks, engaged in Foreign Exchange Control for issue of permits for foreign travel and arrangement of foreign exchange in other cases, and dealing with the exchange of notes and coins when required by the public, are part of the monetary and banking transactions of the Central and State Governments entrusted to the Reserve Bank under the Reserve Bank of India Act, 1934. They are required to be followed by the Reserve Bank in every region on the basis of the guidelines issued for the purpose, and it does not vary from region to region depending on the local conditions or traditions or usages. The efficient performance of any one of these functions at any of the regions does not seem to depend upon the local conditions, traditions and usages. I am, therefore, of the opinion that the said classification has no nexus with the object sought to be achieved.

11. Any classification under Art. 16 should not be a more pretence for an imposition of inequalities. It should not be a device to by-pass the constitutional guarantee of equality of opportunity. The classification may be proved to be convenient for recruitment. The Reserve Bank might have, by experience found that the classification works well in all the regions. But the constitutional mandate cannot be allowed to be submerged by the convenience of the Reserve Bank or by the experience gained in the recruitment. The Court cannot uphold the classification unless it is proved to be reasonable and unless it bears nexus with the object sought to be achieved. In my judgment, both these tests fall short of the requirements and the classification is, therefore, ultra vires of Art. 16(1).

12. On the other contentions urged for the petitioner, I may say a word about them. It was urged that the advertisement issued by the Regional Manager of the Reserve Bank invited applications from every citizen of the country and without imposing any restriction on the minimum qualification possessed by the candidates. It was urged that as the advertisement was silent on those matters, the Reserve Bank is estopped from now contending that the candidates who have passed the qualifying examination from the Universities at other zones, are not eligible for consideration. I do not think that it could give rise to any rule of estoppel in this case. The advertisement may be silent about the basis of the classification but there can be no objection, as held by the Supreme Court in Ram Krishna Dalmia v. S. R. Tendolkar, : [1959]1SCR279 to the matters being brought to the notice of the Court by affidavit to show that there was a valid basis for excluding the petitioners.

13. This takes me to the question of relief which I should grant to the petitioner. It is not in dispute that the petitioner have got more marks in the qualifying examinations than some of the candidates who have been interviewed and selected. Since I have held that the zonal classification insisting on a pass in the qualifying examination from the universities established in the Regional Office is not a reasonable classification, and it has no basis for the object sought to be achieved, the exclusion of the petitioners must be held to be arbitrary and respondents 2 and 3 should be directed to consider their applications in accordance with law.

14. Before parting with the case. I may make it clear that nothing that I have said in this order, shall affect the decision of the Reserve Bank to recruit Class IV employees in any region. They stand on a different ground. The nature of their work is also different.

15. In the result, the rule is made absolute. A write in the nature of mandamus shall issue against respondents 2 and 3 to consider the applications of the petitioners for Class III posts in accordance with law.

16. The petitioners are entitled to their costs. Advocate's fee Rs. 100 in each.